French insurance company AGF has increased its first half year net profits by 8.5%, beating industry expectations. Meanwhile, the insurer said that it expects to deliver a significant dividend based on its full year performance.
AGF, the French insurer majority owned by Allianz, achieved net profits of E738 million, up from a restated year-ago figure of E680 million under IFRS accounting standards. The achievement represented an 8.5% increase on the first half of 2004 and comfortably surpassed industry analyst expectations that profits would be slightly down compared to last year. The insurer’s combined ratio improved by 2.4 percentage points to 93.1%.
In releasing the figures, AGF also indicated its confidence for the full year by revealing that it expects to increase its 2005 dividend by about 25% to around E3.25 a share.
The French insurer’s strong showing has added further fuel to speculation that parent Allianz will look to buy full ownership of it. Allianz already owns approximately 58% of AGF and is in the process of consolidation assets elsewhere in Europe.
Allianz chief executive Michael Diekmann has told Germany’s Die Welt newspaper that a buyout of the whole of AGF would make strategic sense. Likewise, AGF CEO Jean-Philippe Thierry was quoted in German newspaper Handelsblatt as saying that he would not rule out a takeover.